The Michelson Morley experiment was in the 1880s and Tesla held on to the "luminiferous aether" theory until he died in the 1940's I believe. I seem to remember that he thought all other theories were "flawed" like you said.
People will say "Tesla was smart but not a good businessman, etc" and obviously he was a smart guy but still a tragic figure for holding onto old theories some of which bankrupted him.